📊 BBWI Key Takeaways
Is Bath & Body Works, Inc. (BBWI) a Good Investment?
Bath & Body Works demonstrates solid operational profitability with healthy margins (43.7% gross, 15.4% operating) and strong free cash flow generation ($865M), but the company faces severe balance sheet distress with negative stockholders' equity of -$1.3B and elevated debt of $3.9B. Declining net income (-18.7% YoY) combined with a capital structure that limits financial flexibility presents material downside risk despite operational cash generation.
Bath & Body Works shows solid core profitability with a 43.7% gross margin, 15.4% operating margin, and strong free cash flow generation of $865 million, indicating the business remains fundamentally cash generative despite flat sales. However, declining revenue, weaker net income and EPS, modest interest coverage, and negative equity tied to a highly leveraged balance sheet limit the quality of the current earnings profile. The fundamentals support resilience, but not enough growth or balance-sheet strength to justify a more aggressive rating.
Why Buy Bath & Body Works, Inc. Stock? BBWI Key Strengths
- Strong free cash flow generation of $865M representing 11.9% of revenue demonstrates operational cash conversion
- Healthy gross margins at 43.7% and operating margins at 15.4% indicate pricing power and operational efficiency
- Adequate interest coverage ratio of 4.1x suggests near-term debt service capability despite leverage
- Positive operating cash flow of $1.1B provides cushion for debt servicing and capital allocation
- High gross and operating margins for a specialty retailer, indicating durable brand economics
- Strong operating cash flow and free cash flow generation with an 11.9% FCF margin
- Adequate near-term liquidity with a 1.27x current ratio and substantial cash balance
BBWI Stock Risks: Bath & Body Works, Inc. Investment Risks
- Negative stockholders' equity of -$1.3B indicates technical insolvency and severely constrained financial flexibility for investments or acquisitions
- Declining profitability with net income down 18.7% YoY despite flat revenue suggests margin compression and operational headwinds
- Elevated long-term debt of $3.9B against modest equity base creates refinancing risk and limits strategic optionality
- Weak quick ratio of 0.83x indicates potential short-term liquidity stress if operational cash flow deteriorates
- Revenue contraction and double-digit declines in net income and EPS suggest weakening earnings momentum
- High long-term debt burden and only 4.1x interest coverage reduce financial flexibility
- Negative stockholders equity signals an aggressive capital structure and heightens balance-sheet risk
Key Metrics to Watch
- Net income trajectory and margin trends - critical to assess if decline is cyclical or structural
- Operating cash flow sustainability - must remain strong to service debt and fund operations
- Debt reduction progress - ability to return to positive equity is essential for long-term viability
- Revenue growth recovery - current flat growth limiting operational leverage opportunities
- Same-store or comparable sales growth and total revenue trend
- Interest coverage and free cash flow relative to debt obligations
Bath & Body Works, Inc. (BBWI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Bath & Body Works, Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
BBWI Profit Margin, ROE & Profitability Analysis
BBWI vs Consumer Sector: How Bath & Body Works, Inc. Compares
How Bath & Body Works, Inc. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Bath & Body Works, Inc. Stock Overvalued? BBWI Valuation Analysis 2026
Based on fundamental analysis, Bath & Body Works, Inc. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Bath & Body Works, Inc. Balance Sheet: BBWI Debt, Cash & Liquidity
BBWI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Bath & Body Works, Inc.'s revenue has remained relatively flat over the 5-year period, with a 6% decline. The most recent EPS of $3.84 reflects profitable operations.
BBWI Revenue Growth, EPS Growth & YoY Performance
BBWI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.6B | $77.0M | $0.37 |
| Q2 2025 | $1.5B | $64.0M | $0.30 |
| Q1 2025 | $1.4B | $87.0M | $0.38 |
| Q3 2024 | $1.6B | $106.0M | $0.49 |
| Q2 2024 | $1.5B | $99.0M | $0.43 |
| Q1 2024 | $1.4B | $81.0M | $0.35 |
| Q3 2023 | $1.6B | $91.0M | $0.40 |
| Q2 2023 | $1.6B | $99.0M | $0.43 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Bath & Body Works, Inc. Dividends, Buybacks & Capital Allocation
BBWI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Bath & Body Works, Inc. (CIK: 0000701985)
📋 Recent SEC Filings
❓ Frequently Asked Questions about BBWI
What is the AI rating for BBWI?
Bath & Body Works, Inc. (BBWI) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 75% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are BBWI's key strengths?
Claude: Strong free cash flow generation of $865M representing 11.9% of revenue demonstrates operational cash conversion. Healthy gross margins at 43.7% and operating margins at 15.4% indicate pricing power and operational efficiency. ChatGPT: High gross and operating margins for a specialty retailer, indicating durable brand economics. Strong operating cash flow and free cash flow generation with an 11.9% FCF margin.
What are the risks of investing in BBWI?
Claude: Negative stockholders' equity of -$1.3B indicates technical insolvency and severely constrained financial flexibility for investments or acquisitions. Declining profitability with net income down 18.7% YoY despite flat revenue suggests margin compression and operational headwinds. ChatGPT: Revenue contraction and double-digit declines in net income and EPS suggest weakening earnings momentum. High long-term debt burden and only 4.1x interest coverage reduce financial flexibility.
What is BBWI's revenue and growth?
Bath & Body Works, Inc. reported revenue of $7.3B.
Does BBWI pay dividends?
Bath & Body Works, Inc. pays dividends, with $167.0M distributed to shareholders in the trailing twelve months.
Where can I find BBWI SEC filings?
Official SEC filings for Bath & Body Works, Inc. (CIK: 0000701985) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is BBWI's EPS?
Bath & Body Works, Inc. has a diluted EPS of $3.11.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is BBWI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Bath & Body Works, Inc. has a SELL rating with 75% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is BBWI stock overvalued or undervalued?
Valuation metrics for BBWI: ROE of N/A (sector avg: 18%), net margin of 8.9% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy BBWI stock in 2026?
Our dual AI analysis gives Bath & Body Works, Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is BBWI's free cash flow?
Bath & Body Works, Inc.'s operating cash flow is $1.1B, with capital expenditures of $237.0M. FCF margin is 11.9%.
How does BBWI compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 8.9% (avg: 8%), ROE N/A (avg: 18%), current ratio 1.27 (avg: 1.5).